Specific performance is an order of the court requiring a party to a contract to perform their obligations under the contract. Before the court makes an order for specific performance, a party must establish that there is a binding contract on foot and that the other party has breached. Below, we set out what type of breach if required and in what circumstances the court will not order specific performance.
What Type of Breach is Required?
The breach of contract must be either actual or anticipated. An actual breach, as the name suggests, will have occurred when one party has actually refused to perform its obligations under the contract. An anticipatory breach, on the other hand, occurs where one party threatens to refuse to perform their obligations under the contract. An idle threat will not be sufficient. The threat must pose a real possibility that a party will breach the contract.
Circumstances Where the Court Will Not Order Specific Performance
Specific performance is a very complex area of law, and there are many circumstances which prevent the court from making such an order, including:
- Where damages are sufficient: A court will only make an order for specific performance in circumstances where an award of damages would be insufficient. In most cases, an award of damages will be sufficient to compensate the plaintiff.
- Where it compels the defendant to maintain a relationship with the plaintiff: A court will not make an order for specific performance if the effect of doing so compels the defendant to maintain a personal relationship with the plaintiff. Contracts requiring personal service, such as employment, is an obvious example.
- Where a party’s obligations are ambiguous: A court cannot make an order compelling a party to fulfil some obligations when it is unclear what that obligation is. Doing so would set the defendant up for certain failure and as such, a court will not order specific performance in this instance.
- Where the result is unconscionable hardship on the defendant: Here, the requirement is unconscionable hardship – any hardship will not suffice. As such, the court will balance the defendant’s hardship against the plaintiff’s if specific performance is granted or not.
- If a contract came about by mistake, misrepresentation, undue influence or the like.
- If the plaintiff is not ready and willing to perform their own obligations under the contract.
- Where the plaintiff has also substantially breached the contract, enabling the defendant to terminate the contract.
- Where the obligation on the defendant is in effect impossible to perform.
Consequences of Not Complying With an Order of Specific Performance
Failure to comply with a court’s order for specific performance is a very serious matter. A defendant who is found to have not complied with a court’s order for specific performance can be found guilty of contempt of court and can be either fined or some cases, imprisoned.
Key Takeaways
If you believe that a party breaching your contract should be ordered to specifically perform the contract, you should seek legal advice immediately. It’s a complex area of law and it is best you have a specialist helping you to navigate. If you have any questions, or need assistance making an application to the court for an order of specific performance, get in touch with our disputes team.